Air Con & Hot Water Rebates in VIC: What You Need to Know
The Victorian Government has implemented several initiatives to reduce energy consumption and greenhouse gas emissions, while also helping households and businesses lower their energy bills. Two key rebate programs are available for air conditioning and hot water system upgrades, providing generous air conditioning rebates Victoria residents and businesses can access to upgrade to more energy-efficient systems and reduce long-term energy costs.
- Victorian Energy Upgrades (VEU) program – Offers discounts on a wide range of energy-efficient systems and appliances for both households and businesses.
- Solar Victoria Hot Water Rebate program – Focuses exclusively on hot water system upgrades, providing targeted financial rebates to eligible households.
The VEU program is designed around a market-based mechanism, using Victorian Energy Efficiency Certificates (VEECs), while the Solar Victoria program is government-funded and income-tested. Both require working with accredited or authorised providers and selecting approved products. Together, these programs encourage a state-wide shift toward more efficient, environmentally friendly technologies.
Introduction
In recent years, energy prices and environmental concerns have become top-of-mind for many Victorians. Given that air conditioners in Victoria, along with heating and hot water systems in Victoria, account for a significant share of household energy use, upgrading to energy-efficient alternatives presents both an economic and environmental opportunity.
To support this shift, the Victorian Government offers a range of financial incentives—including air conditioning rebates Victoria residents can rely on—through two key programs: the Victorian Energy Upgrades (VEU) program and the Solar Victoria Hot Water Rebate program. Together, these initiatives aim to reduce energy consumption, cut utility costs, and promote sustainability across the state. In this blog, we provide a detailed look at how each program works, who qualifies, what products are eligible, and how you can apply to start saving.
Victorian Energy Upgrades (VEU) Program
Overview
The Victorian Government launched the VEU program in 2009 as a flagship initiative to drive energy efficiency across the state. The Essential Services Commission (ESC) administers the program, with support from the Department of Energy, Environment and Climate Action (DEECA). Together, they created a trading market for Victorian Energy Efficiency Certificates (VEECs), with each certificate representing one tonne of greenhouse gas emissions avoided through eligible energy upgrades.
To meet state-mandated emissions reduction targets, energy retailers are required to purchase VEECs each year. In turn, accredited providers generate these VEECs by carrying out approved energy upgrades—such as installing high-efficiency air conditioning or hot water systems. As a result, the value of these certificates directly funds the discounts passed on to consumers, including the air conditioning rebates Victoria residents and businesses can access to reduce their upfront investment.
Importantly, the VEU program is available to both households and businesses, thereby providing broad access to discounted installations of approved, energy-efficient technologies. In doing so, it empowers a wide range of Victorians to participate in the transition to cleaner energy. Moreover, through this structure, the program delivers both economic and environmental benefits, ultimately supporting a long-term shift toward lower energy consumption across the state. As a result, it plays a pivotal role in helping Victoria meet its climate and sustainability targets.
Air Conditioning Discounts under VEU
Eligibility
To qualify for VEU air conditioning discounts:
- The property must be located in Victoria and typically at least two years old.
- Both residential and commercial properties are eligible.
- The system being installed must be an approved reverse cycle air conditioner (RCAC) listed in the VEU Product Register.
- Each system must be assessed individually for eligibility.
You can verify the product’s approval by referencing the ESC’s official VEU product register.
Indicative Discount Amounts
Discounts vary depending on:
- The system being replaced (e.g. gas, electric, or older RCAC).
- The size and type of the new system (split system, ducted, etc.).
Examples:
- Household upgrades: from $70 to $5,460.
- Business upgrades: up to $8,820, especially when replacing central electric or ducted gas systems with RCACs.
Accessing Discounts
Consumers can:
- Work with a VEU-accredited provider who supplies and installs the system.
- Use their own qualified tradesperson partnered with a VEU provider.
To verify provider status, consult the VEU Registry of Accredited Persons.
Discounts are usually applied upfront at the point of purchase or installation.
Hot Water System Discounts under VEU
Eligibility
Eligible upgrades include:
- Heat pump systems
- Electric-boosted solar hot water
- Commercial heat pump water heaters
Requirements:
- Property must be at least two years old.
- Residential: limit of two upgrades per property.
- Businesses: limit of five upgrades, with potential for more in commercial applications.
Minimum Customer Contribution
All participants must pay at least $200 (including GST) toward the system cost. This policy prevents installations being offered completely free, encouraging meaningful consumer investment.
Accessing Discounts
Consumers must use a VEU-accredited provider, either directly or via a partnered tradesperson. The provider handles the documentation, applies the discount, and issues any necessary compliance paperwork.
To find qualified providers, search the ESC’s VEU Registry and filter by relevant activity type, such as heat pump or solar water heater installation.
Solar Victoria Hot Water Rebate Program
Overview
The Solar Victoria Hot Water Rebate focuses exclusively on heat pump and solar hot water systems, offering rebates to eligible owner-occupier households.
The goal is to encourage replacement of older systems with efficient alternatives, reducing energy costs and emissions from domestic hot water use.
Eligibility Criteria
To qualify:
- You must be the owner-occupier of the home.
- Total household income must be under $210,000 per year.
- Property value must be under $3 million.
- The existing hot water system must be at least 3 years old.
- The property must not have already claimed a Solar Victoria hot water or battery rebate.
- You must use an authorised retailer listed on the Solar Victoria website.
- Only systems listed in the eligible product database are allowed.
Rebate Amount
The rebate:
- Covers 50% of the purchase price, after other discounts (e.g., STCs and VEECs).
- Is capped at $1,000.
- Is paid directly to the retailer, and the homeowner pays the remaining balance.
Application Process
Steps:
- Obtain a quote from an authorised retailer.
- Retailer uploads the quote to the Solar Victoria portal.
- Homeowner completes pre-approval process online, submitting:
- Two forms of ID
- Proof of income for all homeowners
- The quote reference number
- After approval, Solar Victoria issues a QR code.
- Installer must scan QR code onsite before work begins.
- Installation must be completed within 120 days.
Important: If the installation occurs before rebate approval, the rebate may be forfeited unless it’s an emergency.
Comparison of VEU and Solar Victoria Hot Water Rebates
| Parameter | Victorian Energy Upgrades (VEU) | Solar Victoria Hot Water Rebate |
|---|---|---|
| Administering Body | Essential Services Commission (ESC) / DEECA | Solar Victoria |
| Target Audience | Households and businesses | Households only |
| Eligibility Criteria (Income/Property) | None | Yes – income < $210,000, property < $3M |
| Incentive Mechanism | Discount applied by accredited provider | Rebate paid to authorised retailer |
| Incentive Amount | Varies; minimum $200 contribution | Up to $1,000 (50% of cost) |
| Eligible Technologies | Heat pump, solar, electric-boosted solar hot water systems | Heat pump and solar hot water systems |
| Application Process | Via VEU-accredited provider | Direct application through Solar Victoria portal |
| Key Website | ESC Website | Solar Victoria |
General Application Process for Rebates
Whether you’re applying for VEU discounts or Solar Victoria rebates:
- Research eligibility requirements on the program’s website.
- Choose an accredited provider (VEU) or authorised retailer (Solar Victoria).
- Request a detailed quote for your chosen system.
- Apply:
- VEU: Your provider typically handles the paperwork.
- Solar Victoria: Apply directly online via the Solar Victoria portal.
- Wait for approval confirmation before paying any deposits or beginning installation (especially for Solar Victoria).
- Complete the upgrade with the appropriate partner.
- Receive your discount or rebate, either applied at point-of-sale or post-installation.
Official Victorian Government Resources
For up-to-date details and application support, consult these official sites:
- Energy Victoria (program overview):
https://www.energy.vic.gov.au - Victorian Energy Upgrades (VEU):
https://www.energy.vic.gov.au/victorian-energy-upgrades - Solar Victoria Hot Water Rebate:
https://www.solar.vic.gov.au/hot-water-rebate - VEU Registry of Accredited Persons:
https://www.veu-registry.vic.gov.au/public/Participants2.aspx - VEU Product Register:
https://www.veu-registry.vic.gov.au/public/productregistrysearch.aspx
Contact:
- VEU Program Email: energy.upgrades@deeca.vic.gov.au
- VEU Phone Support: (03) 9032 1310
Conclusion
Moreover, the Victorian Government’s energy efficiency programs offer a significant opportunity not only to cut household and business energy bills, but also to support the state’s broader transition to a low-carbon economy. By strategically aligning financial incentives with environmental goals, these initiatives make it easier for Victorians to invest in sustainable, energy-saving technologies. Specifically, by participating in the Victorian Energy Upgrades (VEU) or the Solar Victoria Hot Water Rebate program, consumers can access thousands of dollars in incentives—including generous air conditioning rebates Victoria residents can use to upgrade their climate control systems and reduce long-term costs.
To fully capitalise on these opportunities, you must understand the key differences between the programs and work with accredited providers or authorised retailers. Whether you’re planning to replace an outdated ducted gas heater or install your first heat pump water system, these programs offer a clear pathway to reducing upfront expenses while simultaneously embracing sustainability and long-term comfort.
By making informed choices today, Victorians can enjoy lasting energy savings and contribute to a cleaner future for all.
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